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Feds pick winners with new postal plan

The U.S. Postal Service established a terrible precedent last month when it opted to give one company a fantastic deal on mass advertising, to the detriment of thousands of other private businesses.

We applaud 3rd District Rep. Scott Tipton for stepping into the fray on this issue by seeking a House Oversight Committee hearing on the contract the Postal Service approved with Valassis Direct Mail Inc. We hope the hearing leads to a reversal of the contract decision.

We freely admit that The Daily Sentinel, along with most newspapers in this country, has a direct interest in this. In fact, the arrangement the Postal Service has with Valassis encourages the company to divert advertising inserts away from newspapers and into direct mail. The company receives a rebate on its postage costs of up to 30 percent for doing so.

That, as Tipton noted, is expected to cost the newspaper industry up to $1 billion a year in lost revenue. But it also hurts small advertisers who won’t receive the same postage rebate for their advertising mailings.

If all this were about competition among private companies, it would be one thing. But it’s not. It’s about a quasi-government entity that is supposed to serve all of the public favoring one company — not one industry, mind you, but one specific company — over all others that depend on mass advertising.

The Postal Service doesn’t receive direct subsides from U.S. taxpayers, but it receives plenty of indirect ones. Unlike, say, Fed Ex or UPS, it doesn’t have to pay state or local taxes. And it has received billions of dollars of loans from taxpayers at greatly reduced interest rates.

Even so, the Postal Service is hemorrhaging money, in part because it has enormous financial commitments to its retired employees. But, equally important, more and more people are turning away from snail mail to use email, text messaging and other forms of electronic communication. And they are turning to private companies to deliver important packages.

There are plenty of good people working for the Postal Service, in Grand Junction and around the country. But they are like employees at a buggy-whip factory at the end of the 19th century — working for an entity that is no longer a necessity.

As Postal Service leaders stumble from one idea to another in an attempt to save their floundering enterprise, they shouldn’t be providing a monopoly to one private company through a deal described by a public representative of the Postal Regulatory Commission as “designed to manipulate prices and alter the balance of market forces.”

We hope Tipton continues his fight against this contract and many other members of Congress join him.